November 15, 2017 / 6:45 PM / a year ago

Deutsche Bank hires specialist to head U.S. ETF trading division

NEW YORK (Reuters) - Deutsche Bank AG’s U.S. securities division has hired a veteran of the exchange-traded fund (ETF) business to manage sales in the growing sector, according to a person familiar with the matter on Wednesday.

The bank’s Deutsche Bank Securities unit hired Chris Hempstead, who built up the ETF business at KCG Holdings Inc, as U.S. head of ETF sales, according to a person not authorized to discuss the matter publicly.

Deutsche Bank and Hempstead declined to comment, but his account on the social media website LinkedIn reflected the new job title on Wednesday.

Hempstead was one of the people who shored up KCG’s ETF trading business after Reggie Browne, known as “the Godfather of ETFs,” and his team left in 2013 for Cantor Fitzgerald.

Hempstead was laid off in May after Virtu Financial Inc announced buying KCG in a $1.4 billion deal that brought two of the major U.S. electronic trading and market-making firms together.

ETFs, which let investors buy and sell entire market segments, are among the most traded securities in the U.S. stock market. They have attracted a record $434 billion in new cash this year, pushing their global total to $4.5 trillion, according to ETFGI, a consultancy.

Intermediary trading firms can profit on the difference between the market price of an ETF and the value of the stocks, bonds or other assets it holds.

But calm markets and low trading volumes have crimped profits. Trading and liquidity firms that specialize in ETFs are expected to increase total revenue just 2 percent over the next year, compared to 10 percent overall for publicly traded asset managers and other companies with ETF-related businesses, according to Toroso Investments LLC, which tracks the space.

Goldman Sachs Group Inc substantially scaled back its ETF trading operations, specifically a business that commits to providing competitive buy-and-sell quotes in exchange for fee rates from exchanges, Reuters reported in July. The bank maintains trading and asset management businesses focused on ETFs.

Deutsche Bank plans to hive off its own asset management unit, which builds ETFs carrying the Xtrackers brand, in an initial public offering.

Hempstead’s hiring shows the bank is continuing to invest in grabbing more of the market in trading ETFs that were built by other asset managers.

Reporting by Trevor Hunnicutt; Editing by Richard Chang

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below